Declared pricing data would be used to monitor pricing practices and prevent covert agreements and collusion to establish monopolies.

MOIT recently dispatched a document seeking feedback from relevant ministries, agencies, businesses, and industry associations to refine the draft decree on petroleum trading.

In the latest draft, the ministry's drafting body has retained its proposal that major petroleum traders and independent distributors independently set wholesale and retail fuel prices in accordance with pricing laws and market mechanisms.

For areas distant from ports, primary storage depots, or fuel production facilities, if audited, reasonable, and valid actual expenses from the preceding year exceed standard operating costs, primary wholesalers may designate these zones and decide actual selling prices in these areas.

However, prices must not exceed 2 percent of the retail fuel prices announced by the wholesaler at that same juncture. For mazut (fuel oil), this ceiling applies to wholesale prices.

In these locations, independent fuel distributors are also allowed to decide selling prices. However, retail fuel prices, mazut prices, and wholesale prices must not exceed the highest price published by the primary wholesaler for the same region and time.

A major modification in this draft is the introduction of a fuel price calculation formula for primary wholesalers and independent distributors.

The fuel price formula for primary wholesalers comprises purchasing cost, supply sourcing expenses, standard operating costs, profit margins, and taxes.

Among these, purchasing costs and supply sourcing expenses from imports or domestic purchases, as well as profit margins, are determined by wholesalers based on actual business operations. Taxes strictly follow statutory tax regulations.

Initial standard operating costs apply according to levels published by MOIT for the most consumed types of gasoline, diesel, and mazut in the market, incorporating costs allocated to distributors within their distribution systems.

Annually, no later than January 31, MOIT will announce adjusted standard operating costs based on fluctuations in the average Consumer Price Index (CPI) of the preceding year. If CPI data is unavailable, existing levels remain in effect until an adjustment notice is issued.

Primary wholesalers must report actual annual operating expenses, explain variances against established standards, and submit independently audited expense reports every three years for review.

For fuel pricing by distributors, MOIT proposes that retail fuel prices charged by distributors operating within the systems of major petroleum traders will be determined by the distributors themselves. However, their prices must not exceed those announced by the major petroleum traders supplying them.

Distributors may determine prices lower than those set by the primary wholesaler, while taking responsibility for their price decisions, disclosures, listings, and declarations.

When a primary wholesaler adjusts its price, distributors must ensure their selling prices do not exceed the new capped price from the moment it takes effect.

Primary fuel wholesalers are responsible for fully communicating price levels, geographic coverage, and effective times to distributors.

The retail fuel prices of independent distributors are determined based on actual purchasing costs, reasonable circulation and distribution expenses, self-determined profit margins, and statutory taxes and fees.

The actual purchasing costs are calculated after deducting discounts, rebates, and price-reducing adjustments. Cost-forming components must be consistently determined regarding measurement units, calculation methods, and cost scope, avoiding double-counting expenses, taxes, or fees already embedded in the purchase price.

Independent distributors decide their own prices and assume accountability for their decisions.

Additionally, MOIT proposes several regulations regarding price determination for independent fuel distributors sourcing from multiple suppliers.

Accordingly, independent distributors decide retail prices - and wholesale prices for mazut - based on actual purchasing costs, reasonable circulation and distribution expenses, profits, and statutory taxes and fees.

When adjusting prices, distributors must identify variations in each cost element compared to the immediately preceding adjustment.

Distributors are permitted to decide prices suitable for market and business conditions, while executing price announcements, listings, declarations, and adhering to applicable price ceilings.

The draft also explicitly stipulates that during price stabilization periods, all traders must comply with fixed prices or price ceilings set by competent authorities.

Tam An